Beatles Beaten by Apple

Not since the heyday of Spy versus Spy has there been a battle of such worthy--or similarly monikered--adversaries.

A British court has gotten to the core of the three-year Apple versus Apple trademark-infringement smackdown, ruling that the computer giant was within its rights to use its own fruit-shaped logo to market its megapopular iTunes software, despite protestations from the Beatles' record company.

"I find no breach of the trademark agreement has been demonstrated," Justice Edward Mann said in his ruling. "The action therefore fails."

Apple Corps, which is owned by Paul McCartney, Ringo Starr and the families of John Lennon and George Harrison, argued that the software giant's use of an apple logo "in connection with musical content" violated a 1991 agreement between the two companies, which established strict "field of use" guidelines for the shared, produce-inspired logos. (Apple Corps' logo is a photorealistic green apple, while Apple Computer, which was named in honor of the Fab Four, has a logo featuring a graphical fruit with a bite missing.)

The 1991 agreement, brokered as part of a $26 million, out-of-court settlement from Apple Computer, delineated in which aspects of business each company would be granted the trademark's exclusive rights.

The record company was granted the rights in musical contexts, while the Steve Jobs-founded company was given free reign in its software endeavors.

The problem was that in 1991, no one could foresee the digital music age.

After iTunes and iPods became pop-culture phenomena, Apple Corps took issue with the computer company's nibbled-apple logo appearing on the music-oriented devices.

Justice Mann, however, did not see the problem.

He ruled against the Liverpudlians' label on a virtual, no pun intended, technicality, claiming that Apple Computer used the logo to promote its online shop and not the music itself. Therefore, the judge said, it did not break its part of the agreement, as iTunes was not a creator of music content, but instead was primarily a data-transmission service.

"I think the use of the apple logo is a fair and reasonable use of the mark in connection with the service," Mann said.

The judge further claimed that as iTunes did not own the rights to the music and was simply a supplier, it had fair rights to the apple logo and did not infringe upon the companies' previous agreement.

Apple Corps was also ordered to pay Apple Computer's legal bill, estimated at more than $3.5 million.

Geoffrey Vos Q.C., Apple Corps' lawyer, took issue with the ruling, saying to call iTunes simply an electronic device was a "perversion" of the constraints laid down in the respective empires' agreement. He argued that founder Jobs himself equated downloading music with buying an album in the modern world.

Vos vowed to appeal the decision.

For his part, Jobs released a statement saying there were no hard feelings.

"We are glad to put this disagreement behind us. We have always loved the Beatles, and hopefully we can now work together to get them on the iTunes Music Store."

While a spokesman for Apple Corps stayed mum on a partnership with their courtroom adversaries, testimony from Neil Aspinall, managing director of the label and former Beatles road manager, indicated that the band was prepping their entire catalog for online sales, though he would not say whether the iTunes was in the running. Last year, Yoko Ono released Lennon's solo catalog to virtually every download service except iTunes.